Today the free Netflix iPad application was updated to support video output via Apple’s optional dock connector to VGA adapter. This lets you watch your video on a much larger display. It's a feature I have been waiting for since the application was available and a much welcomed addition to this app!
To watch instant content you do need a Netflix subscription and if you plan on using that VGA adapter (available from Apple Online) to watch an iTunes video you can forget about it as Apple hasn't enabled that for anything other than their A/V composite and component cables.
If you give this a try let us know how it goes in the comments below!